Report: Investment banker Allen & Co. gets Loopt in?

This post was updated at 10:55 a.m. PST with clarification from a source close to Allen & Co.

According to a TechCrunch report, mobile friend-finding service Loopt has looped in boutique investment banking firm Allen &Co. to land it a buyer or locate financing. However, sources close to Allen & Co. maintain that the $250 million number floated in the TechCrunch report is very high.

Loopt, which reportedly raised $13.3 million in venture funding from Sequoia Capital and New Enterprise Associates, is facing an environment where money is hard to come by.

Mergers and acquisitions took a blow in the third quarter, with tech M&A falling to 691 deals with a value of $37 billion--down roughly a third from the same time a year ago.

And financing deals are equally hard to come by via traditional means, so finding a strategic investor may be the best situation for a number of companies in need of raising capital.

If Apple were in the market to snap up some of its more popular iPhone applications developers, Loopt would be sitting pretty. Loopt's service ranks as the top iPhone social-networking application in its App Store, surpassing Facebook and MySpace Mobile.

Update: Sources close to Allen & Co. say the investment firm is working with Loopt, but not considering anything close to the $250 million valuation TechCrunch reported.